High street bakery giant Greggs is poised to unveil its latest financial results this week, providing a detailed look at how the company is managing a complex array of challenges. These include the ongoing impact of weight loss treatments on consumer appetite, persistent cost of living pressures, increased labour expenses, and upcoming tax changes. The popular chain, known for its sausage rolls and baked goods, is expected to report a significant dip in profitability amid these headwinds.
Financial Forecast and Profit Decline
Analysts anticipate that Greggs will reveal a 9% drop in pre-tax profits, with forecasts pointing to approximately £173 million for the year ending December 27. The full financial details are scheduled to be announced on Tuesday, March 3, 2026. This decline comes despite a strong performance in the latter part of 2025, where the company saw sales growth accelerate notably.
Sales Performance and Store Expansion
In the final quarter of 2025, Greggs experienced a boost in like-for-like sales growth, which climbed from 1.5% in the third quarter to 2.9%. Total sales increased by 7.4% during this period, partly driven by the group's aggressive store opening programme. The company expanded its footprint by opening 121 new stores last year, contributing to overall revenue growth.
Challenges from Weight Loss Drugs and Consumer Confidence
Chief Executive Roisin Currie has previously warned that appetite-suppressing medications are having a tangible impact on the bakery chain's business. Greggs may provide further details on how these weight loss treatments are altering customer eating habits and affecting sales. Additionally, the company has described consumer confidence as "subdued," leading to a cautious outlook for 2026.
Cost Pressures and Inflation Trends
Greggs has been grappling with rising labour costs and impending tax rule changes, which are squeezing margins. The group increased prices on several products and deals last year, and shareholders will be keen to see how these adjustments have influenced trading. On a positive note, inflation is expected to be shallower in 2026 compared to the previous year, offering some relief on the cost front.
Analyst Perspectives and Future Outlook
Analysts at Deutsche Bank have noted that expectations for 2026 "have already been set low" and are "unlikely to change" significantly. Aarin Chiekrie, equity analyst at Hargreaves Lansdown, commented, "Investors are eager to hear how 2026 is shaping up in the early months. While cost pressures are beginning to ease, Greggs still faces multiple challenges, including unhelpful tax changes, minimum wage increases, slowing UK economic growth, and cost-conscious consumers."
Despite the profit dip, Greggs remains a key player in the UK retail sector, with its store expansion and sales growth indicating resilience. However, the company must navigate a delicate balance between managing costs and adapting to shifting consumer behaviours in the coming year.
